Indiana is one of many states that charge undocumented student out of state tuition, no matter how long they have lived in a state.
More than 32,000 students now use scholarships, up from around 4,000 students the first year, 2011-2012.
The $3,000 scholarship will be used to fund students' humanitarian efforts.
A large increase is anticipated in the number of students taking advantage of the scholarship program over the next two years.
IU's Gay, Lesbian, Bisexual and Transgender Alumni Association is raising money for their academic and emergency scholarships.